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The Equity Premium: It's Still a Puzzle

Autors:

John Y. Campbell

Dean Corbae

John Heaton

Mark Huggett

Beth In

John Kennan

Deborah Lucas

Barbara McCutcheon

Rajnish Mehra

CiteWeb id: 20160000041

CiteWeb score: 791

The paper examines the literature that attempts to resolve the equity premium and riskfree rate puzzles. It demonstrates that the puzzles will confront any model of asset prices that relies on three crucial assumptions: preferences have a particular parametric form, asset markets are complete, and asset trade is frictionless. A survey of the literature that relaxes these assumptions reveals that there are now several plausible explanations of the seemingly low riskfree rate, but the large size of the equity premium remains a puzzle. (This abstract was borrowed from another version of this item.)

The publication "The Equity Premium: It's Still a Puzzle" is placed in the
Top 10000 in category Economics.

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